Date: 20031223
Docket: A-315-02
Citation: 2003 FCA 489
CORAM: DÉCARY J.A.
NADON J.A.
PELLETIER J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
JACQUES CARLE
Respondent
Hearing held at Montréal, Quebec, on September 17, 2003.
Judgment delivered at Ottawa, Ontario, on December 23, 2003.
REASONS FOR JUDGMENT BY: DÉCARY J.A.
CONCURRED IN BY: NADON J.A.
PELLETIER J.A.
Date: 20031223
Docket: A-315-02
Citation: 2003 FCA 489
CORAM: DÉCARY J.A.
NADON J.A.
PELLETIER J.A.
BETWEEN:
THE ATTORNEY GENERAL OF CANADA
Applicant
and
JACQUES CARLE
Respondent
REASONS FOR JUDGMENT
DÉCARY J.A.
[1] By order made on September 24, 2002, this Court ordered that this case (Carle, A-315-02) be heard together with the cases of Casaubon (A-314-02), Lampron (A-316-02), Trahan (A-317-02), Lapointe (A-318-02), Bellemare (A-319-02), Lévesque (A-320-02) and Gélinas (A-321-02). The order also provided that the reasons for the order made in this file would apply mutatis mutandis to the other cases.
[2] At the hearing, it was agreed that, because of Mr. Lapointe's death, there had been a write-off in docket A-318-02 and that, accordingly, the application for judicial review was to be dismissed in that file on the basis that the issue had become moot.
[3] It was also agreed at the hearing that certain issues were not raised in some of the cases. I will take this into consideration while examining each issue and in the wording of the judgment that will dispose of each of the cases.
[4] The years subject to the Unemployment Insurance Act overlap with others that are subject to the Employment Insurance Act. I will refer only to the Employment Insurance Act, , because this overlap has no bearing on the issues, when necessary. I will likewise refer to the Canada Employment Insurance Commission (the Commission), which replaced the Canada Employment and Immigration Commission on July 12, 1996.
The facts
[5] There are very few relevant facts. I will describe here the ones in the Carle case.
[6] Mr. Carle, a truck driver, applies for benefits for the employment that he had in the years 1994, 1995 and 1996. (For the purposes of this application, I am disregarding the year 1993, which is not at issue.) On each of these applications, he indicated that he had stopped working because of a shortage of work. He also sent the Commission records of employment issued by his employer, which confirmed his statements. The Commission then established three benefit periods by calculating, for each one, the rate to which Mr. Carle was entitled.
[7] On May 14, 1997, after learning that a "banked hours" system was being used by the employer, the Commission asked the Minister of National Revenue (the Minister) to determine Mr. Carle's insurable earnings and his number of weeks of insurable employment. Under this banked hours system, the claimant and the employer had provided falsified records of employment. These records did not reflect the number of hours actually worked or the number of weeks during which the work was actually effected. Here, for example, is how this system was used by Mr. Carle, according to what was found when he was under investigation:
[TRANSLATION] He has been working for the employer for 22 years and has no record of the hours he worked in the years 1994, 1995, 1996. He has no explanation to offer for the fact that he was paid for 44 hours in weeks when he had not delivered any concrete, nor for the fact that there were a lot of days during these three years when he made deliveries and there was no pay issued. He admits that he had time accumulated but does not have any record through which the hours he actually worked in those years could be determined.
(Applicant's record, volume III, page 622)
[8] On September 22, 1997, the Minister made his decision, relying on information obtained from the employer in order to do so. He came to the following conclusions: in 1994, 38 weeks of insurable employment and $10,417 in insurable earnings; in 1995 and 1996, respectively, 27 weeks and $8,607, 37 weeks and $10,671.
[9] Mr. Carle did not appeal this decision by the Minister.
[10] In reply to the Commission's request for his comments regarding the information obtained from the employer, Mr. Carle said, on October 28, 1997, that he did not agree with the said information and urged the Commission to rely solely on the information that he himself had already provided and upon which the Commission had relied to establish his benefit rate.
[11] On February 19, 1998, the Commission informed the applicant that it was of the opinion that he had made 14 false or misleading statements for the year 1994, and imposed a penalty on him in the amount of $2,025.
[12] That same day, the Commission informed him that it was of the opinion that he had made 11 false or misleading statements for the year 1995, and imposed a penalty on him in the amount of $2,264.
[13] On February 26, 1998, the applicant appealed these two decisions to the Board of Referees.
[14] On April 20, 1998, the Commission informed Mr. Carle that, pursuant to the Minister's decision, changes had been made to his benefit rate for the 1994, 1995 and 1996 claims. These changes were based on the figures contained in the Minister's decision.
[15] That same day, the Commission informed Mr. Carle that he had knowingly made eight false or misleading statements and imposed a penalty of $235. It also gave him a notice of a minor violation. These notices do not expressly identify the year to which they refer.
[16] On April 29, 1998, Mr. Carle appealed the decisions made by the Commission on April 20, 1998, to the Board of Referees.
[17] On May 13, 1998, the Commission imposed a penalty of $11,564 on the employer.
[18] On June 5, 2001, the Board of Referees dismissed the appeal.
[19] On April 10, 2002, the Umpire allowed Mr. Carle's appeal and referred the case back to the Board asking the Board to request that the Commission obtain a redetermination by the Minister of the issue of insurability. The Umpire also asked the Board of Referees to reconsider the issue of the amount of the penalty. Moreover, the Umpire cancelled some of the notices issued by the Commission, the content of which he found to be insufficient.
The issues raised
[20] The applicant submits that the Umpire (1) erred in concluding that the Board of Referees had not exercised its jurisdiction by failing to refer the matter to the Minister for redetermination. (2) erred in concluding that certain notices issued by the Commission regarding the false or misleading declarations did not identify the impugned misconduct; and (3) took irrelevant considerations into account in the examination of the amount of the penalty. A fourth question - whether the impugned statements were made knowingly - is no longer in dispute.
the first issue: the Board of Referees' failure to exercise its jurisdiction
[21] This issue is raised in all of the cases.
[22] The Referee found that:
[TRANSLATION] Given that, after Revenue Canada's decision, the Commission used figures that differed from those that it had provided to Revenue Canada in support of its request for an opinion on insurability, it should have . . . consulted Revenue Canada again to ask it to redetermine the same matters but in accordance with the new figures in question.
[23] This conclusion betrays a misunderstanding of the two-pronged nature of the Employment Insurance Act. As this Court has reiterated many times, the issues pertaining to the insurability of employment are the responsibility of the Minister. Once the Minister has made a decision and the individual concerned has not appealed anything in this decision to the Tax Court of Canada, the Minister's decision becomes definitive and is binding on the Commission.
[24] As there was no appeal in this case, the file is closed insofar as it pertains to the Minister's jurisdiction. The respondent's counsel contends that the time for appeal could run only from the moment that the respondent learned the actual consequences of the Minister's decision, i.e. as of February 19, 1998. This is obviously not the case and, in any event, no application for extension of time was submitted in a timely fashion.
the second issue: the failure to identify impugned misconduct
[25] This issue is raised in all of the cases with the exception of Mr. Levesque's (A-320-02).
[26] The Umpire ordered that the notices filed as exhibits P-28, P-29, P-33 and P-39, be struck on the basis that they did not enable the claimant to identify the misconduct he was being accused of and, therefore, to defend himself adequately.
[27] With respect to notices P-28 and P-29, sent on February 19, 1998, they identified the misconduct alleged against the respondent because the Commission specifically indicated the weeks in respect of which a false or misleading statement was made and described the impugned misconduct and the undeclared earnings for each week. The finding of the Umpire is therefore clearly unfounded.
[28] The situation is less obvious with respect to notices P-33 and P-39, issued on April 20, 1998. These notices provide sparse information, but the Board of Referees found that "[TRANSLATION] these notices of violation follow earlier notices (notices of penalty), and that this is implicit in the case of each of them . . .". This finding by the Board of Referees is essentially a finding of fact; it is not patently unreasonable in the circumstances of this matter where there was evidence of a scheme involving both the employer and the claimants. Furthermore, the handwritten notes at the bottom of the page show that exhibit P-33 must be read with exhibit P-32, which refers to the year 1994, and that exhibit P-39 must be read with exhibit P-38, which refers to the year 1996. The Umpire could not then substitute his own finding. Even if the situation varies somewhat from one case to another, I do not believe that the Umpire's intervention was warranted in any of the cases.
the third issue: the amount of the penalty
[29] This issue is raised in all of the cases, except in those of Mr. Lapointe (A-318-02) and Mr. Trahan (A-317-02).
[30] The Umpire, essentially, criticizes the Board of Referees for failing to consider the considerable disparity between the penalty imposed on the employer and those imposed on the claimants, or the evidence of the precarious physical or financial well-being of the claimants.
[31] I note that in the Commission's written observations addressed to the Board of Referees, the Commission notes that "[TRANSLATION] as this is a case of connivance between employer and employee, the Commission wants to stress to the Board of Referees that it also imposed a penalty on the employer" (applicant's record, volume 3, page 658). The Commission does not mention the amount of the penalty imposed on the employer but it is obvious that it thought it relevant to the case that a penalty was also imposed on the employer. The Board of Referees could not then make its decision without making a determination on the claimant's argument based on the discrepancy between the amount of the penalty imposed on the employer and the amount of the penalty imposed on the claimants.
[32] As for the precarious physical and financial well-being of the claimants, the Board of Referees found that there was a lack of evidence when, to the contrary, there was evidence in the record.
[33] The Board of Referee's decision regarding the amount of the penalty is therefore so terse that the Umpire was entitled to intervene and to refer the cases to the Board of Referees for a determination on the circumstances specific to each of the cases. It is not apparent, upon reviewing the reasons of the Board of Referees, that it actually considered the arguments and evidence presented to it. The circumstances of these cases are not unlike those in Attorney General of Canada v. Stark, A-701-96, unreported, May 7, 1997.
[34] Accordingly, I would allow the application for judicial review with respect to the first and second issues raised and I would dismiss it with respect to the third issue.
[35] A copy of these reasons will be filed in each of the files in lieu of the original and in order to dispose of them, and the formal judgment delivered in each case will take the particulars of each case into account.
[36] Under the circumstances, there is no basis for awarding costs.
"Robert Décary"
J.A.
"I concur.
Marc Nadon, J.A."
"I concur.
J.D. Denis Pelletier, J.A."
Certified true translation
Kelley A. Harvey, BA, BCL, LLB
FEDERAL COURT OF APPEAL
SOLICITORS OF RECORD
DOCKET: A-315-02
STYLE: Attorney General of Canada v. Jacques Carle
PLACE OF HEARING: Montréal, Quebec
DATE OF HEARING: September 17, 2003
REASONS FOR ORDER BY: Décary J.A.
CONCURRED IN BY: Nadon J.A.
Pelletier J.A.
DATED: December 23, 2003
APPEARANCES:
Paul Deschênes FOR THE APPLICANT
Jean-Guy Ouellet FOR THE RESPONDENT
SOLICITORS OF RECORD:
Department of Justice FOR THE APPLICANT
Ottawa, Ontario
Ouellet, Nadon et Associés FOR THE RESPONDENT
Montréal, Quebec
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